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Impact of Rising Natural Gas Prices on U.S. Ammonia Supply
Wen-yuan Huang (au)
The volatile and upward trend in U.S. natural gas (NG) prices from 2000-06 has led to a 17% decline in the Nationís annual aggregate supply of ammonia. During the period, U.S. ammonia production declined 44%, while U.S. ammonia imports increased 115%. Also, the share of U.S.-produced ammonia in the U.S. aggregate supply of ammonia dropped from 80 to 55%, while the share from imports increased from 15% to 42%. Meanwhile, ammonia prices paid by farmers increased from $227 per ton in 2000 to $521 per ton in 2006, an increase of 130%. NG is the main input used to produce ammonia. Additional increases in U.S. NG prices could lead to a further decline in domestic ammonia production and an even greater rise in ammonia imports. Illus.
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